Oil and Natural Gas Corporation (ONGC) plans to commission its first merchant power plant by 2012. The unit, located near Agartala in Tripura, will have a capacity of 740 mw and will be fired by gas produced from the company's own gas fields in the north-eastern state.

A K Balyan, director, business development, ONGC, said, "The total cost of the project is estimated at Rs 5,000 crore and the plant will be commissioned by 2012."

While generation will involve an investment of Rs 3,000 crore, the rest will go into setting up of a transmission system to supply power to various north-eastern states, he said at the sidelines of a power conference organised by India-Tech Foundation in Mumbai.

Balyan said a special purpose vehicle, ONGC Tripura Power Company (OTPC) Ltd, is overseeing the construction of the power plant. ONGC has 26% stake in OTPC, with IL&FS and the Tripura government holding 23% and 5%, respectively.

BHEL and General Electric have been given a contract of Rs 2,200 crore for supplying equipment for the power plant.

ONGC has already signed a power purchase agreement with the Tripura government for supplying 150 mw. "Other states are also showing interest in purchasing power from us," Balyan said.

The company has also joined hands with PowerGrid to set up a transmission line to link Palatana with the national grid at Bongaigaon in western Assam. The cost of the project is Rs 2,000 crore, with PowerGrid contributing 26% and ONGC 23%. The remaining will come from other small investors.